Latest news with #NileshShetty
Time of India
2 days ago
- Business
- Time of India
FIIs won't let market rise and DIIs won't let it fall but retail investor real hero: Sunil Subramaniam
Live Events You Might Also Like: Bet on 3 sectors generating value in this volatility, be wary in 2 sectors: Nilesh Shetty You Might Also Like: Why is the market rising despite 50% tariffs and other dire predictions? Chakri Lokapriya answers You Might Also Like: Portfolio reshuffling contributing to market volatility? Deven Choksey explains (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Market Expert, talks about India's market resilience, the role of retail investors , the impact of US tariffs as well as expectations for the festive season. He also analyzed valuations across market caps. The market looks not just at the PE ratio which is one year forward PE, but also at PEG ratio, where you divide the PE by the growth rates. Mid and small-cap stocks currently trade at higher PEs, demanding superior growth to justify valuations compared to largecaps. While seemingly overvalued based on current forward PEs, strong growth expectations, particularly in auto and consumer durables during the festive season, could validate these valuations. Fund manager allocation towards mid and small-caps suggests continued buying support despite valuation mentioned the strong support of DIIs, but I would say it is the strong support of retail investors in India. The DIIs have no choice in the matter because mutual fund investors are filling their coffers with money. Despite all the tensions of the last few weeks and the months, retail investors are constantly reposing their faith in mutual funds and with mutual fund managers there is a limit to how much cash they can the point is that it is actually the faith of the common man in the Indian future of the economy, of the markets, of everything that is driving this and DIIs are only pass-through vehicles. They may choose which sectors to put in, which cap curve to put in, even that is limited because about 40% of the total flows that come to the mutual fund industry are in the mid and smallcap broader market. So, ultimately we have to give credit to the aam janta or aam aadmi (common man). They are increasingly reposing their faith in the economy in the current leadership of the country and in fact Mr Trump's 50% tariff is probably acting as a rallying point for the country to take a very strong give a hand to the Indian public that they are standing firm in the face of FII selling. So, that will continue and you will see that the domestic data are coming through very strongly. You saw the cut in the inflation to eight-year low and naturally that strengthens the case for an RBI rate cut in the next policy and the US Fed also now most likely to do a rate cut in September is what the data are showing, which means RBI's hand will be strengthened even more for a rate cut because then the differential interest rates between India and US will widen and cause pressure on the all in all, even a 50% tariff, probably 0.5% to 0.8%, is the worst case scenario impacting our GDP. So, we will still be at 6% plus. So, there is good news on the domestic front. Mr Trump and the international scenario is not very comforting, so FIIs are still selling more but the markets will then you don't mind a Hindi Bollywood correlation here to the markets, so there used to be this villain called Ajit, very famous for his one liners. So there is this famous one liner of his which applies to the market at this point. It is: Isko liquid oxygen mein duba do, liquid jeene nahi dega aur oxygen isse murne nahi dega, (drown him in liquid oxygen. Liquid won't let him live and oxygen won't let him die). Applied to the market situation, it is, FIIs isse badne nahi de rahe hai aur DIIs isse girne nahi de rahe hai (FIIs are not allowing the market to rise and the DIIs are not allowing it to fall). .So, the market is in a liquid oxygen early arrival of the festival season is very important. This time, Diwali is coming by 23rd October. That is very crucial and everybody is geared to make this a super success because RBI has supported through rate cuts and there is a CRR cut coming into play very shortly. The dates are getting closer – September 5th. So enough liquidity, rate cuts; already 77 basis points has been passed on. I expect the balance 23 odd basis points to be passed on and there are chances of a fresh RBI rate cut supported by a Fed rate cut and the low inflation is fiscal policy. Of the Rs 1 lakh crore, so far, the customers seem to have preferred to save rather than spend and that is the data showing. But maybe they are all waiting for the festive season because that is when discounts come from various competing manufacturers and NBFCs and banks reduce the EMIs to make it a very good package for people to go and upgrade their cars, their house, or buy that consumer durable they have been waiting this time things are building up for the festive season to be a real dhamaka season. Remember one thing, the festive season promises good topline sales. But how companies adjust their margins, we will get to know only when the results come out January 10th onwards for the festive season. But that being said, sales will lead to a private capex pickup because capacity utilisation will go up in the country. So, I think that the market is ready to ignore the international tensions at this everybody talks about 50% tariff, but it is actually two 25%s. The first 25% is economy related to the fact that we have not been able to come to terms on a trade agreement. We have a hard line on agriculture and dairy, they have a hard line on opening up our market. But the second 25% is political. It is not related to India at all. It is to do with Russia. India was collateral damage. We are just a soft target being used by the US to put pressure on Russia and they are not able to do the same with China because China is too important to the US. The trade deficit with China is $350-400 billion against India with only $50 Trump is saying India ki, isko thappad maro, Russia pe jake result dikhega. Toh this 15th August ka jo bhi talk hote hai na, (If you slap India, it will have an impact on Russia. Lets see what happens in the August 15 talks). If there is a positive signal, then yeh 25% hat jaiyega (then this 25% will be gone). If that really happens, then the market will be relieved that instead of fighting a very uneven battle at 50%, at 25% we are more or less level playing field with the other competing countries. So, we wait for 15th August to give us that boost, that hopefully those talks should go well for our absolutely. Right now, we are heading for a long weekend with Krishna Jayanti and Independence Day. That is a four-day weekend when domestic tours and travels will take off and then there is Ganesh Chaturthi around that. Bombay shuts down for a week and you have again a long vacation and then you have the Diwali weekend. So, yes, festive travel and tour and hotel rates are already showing that. They have all doubled or something over the last year or so. The rates are very exorbitant. So, to that extent, it is good for the hotel and the airline I expect a boost in auto which is a key element. That is where the EMI impact comes in a big way and people build up to buying that next car and you see a lot of new launches and a lot of competition in the auto sector means that you are going to see really a set of very good purchasing options. A combination of lower EMI and manufacturing discounts around Diwali and Dhanteras is a good time to buy new things. I expect the auto sector to show up and a good monsoon should play out in terms of rural demand with entry- level cars and from a market perspective, in this quarter whatever numbers happen, when you go to the next quarter, FIIs and DIIs both look to FY27 earnings to discount it. So, automatically you get the price correction of another 10% growth in the nominal GDP for next year coming through into the valuations. In that sense from a crossover perspective, we are in a sweet spot now where we will build up to a more reasonable valuation probably starting October onwards for the Indian markets. This is not just about the economy and growth, but the markets also should see a big change in their outlook starting October according to are reasonably placed in the largecap space. If I look at the recent earnings top line is in the high single digit but bottom line growth is about 10% which is in line with the nominal GDP and the valuations though they were 21x, and still factoring that growth over the next two years. Largecaps are reasonably close to that mid and smallcaps, we are dealing at about 31-32 PE. So, what the market is saying is that though smallcaps and midcaps especially are probably growing much faster than largecaps, that still is not good enough. We need a much higher growth rate from the midcaps. So, the market looks not just at the PE ratio which is one year forward PE, but also at something called the PE growth, the PEG ratio, where you divide the PE by the growth rates. So, the higher midcap and smallcap valuations have to be justified by superior growth compared to largecap, that is the mid and smallcaps are going to deliver the same kind of growth as largecaps, they are clearly overvalued. But my confidence is that in auto and consumer durables, all are largely midcap and smallcap players., I believe that those earnings will get justified come the next quarter. But right now, if you look at purely the current forward PEs, midcaps and smallcaps are definitely valued much more expensive than largecaps and much more expensive than their historical averages. So, purely from a number perspective, they seem to be if you believe that the growth story will come into play in the festive season and therefore the valuations also factor in for one more year, I would say that mid and smallcaps do not look as overvalued as they look from a data perspective. Second aspect is that just these valuations do not mean that buying support is going to be less because, 40% of the new cash in the hands of fund managers is for mid and smallcap buying, which means that despite their seeming over valuation from a near-term perspective, buying support will continue to be you might see a situation where before those October numbers come in, the valuations go up even higher than today. So, to say that they are overvalued and hence avoid would not be a right decision because there is liquidity support for mid and smallcaps from the DIIs.
Economic Times
09-07-2025
- Business
- Economic Times
Bullish on 4 sectors from medium perspective; Phoenix Mills, JSW Infra 2 top picks: Dharmesh Shah
Live Events You Might Also Like: Global headwinds: Should one focus on largecaps or look at midcaps and smallcaps? Nilesh Shetty answers You Might Also Like: Is the puck moving from discretionary to consumer staples? Amnish Aggarwal answers (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , AVP, Technical Analyst,, says Indian markets are consolidating, with strong support around 25,200-25,100 on the Nifty. Metals, real estate, PSU banks are the ones one should definitely look out from the medium perspective. While awaiting the US-India trade deal outcome and Q1 numbers, stock-specific actions dominate. Real estate remains positive, with Phoenix Mills as a top pick due to its retail expansion plans. JSW Infra is favored in logistics, with a target of Rs 336 and a stop loss of Rs market seems to be looking for a bit of a breather. There is anxiety ahead of the US-India trade deal. We believe going forward the market should trade positively because the Nifty seems to be consolidating above the breakout levels which also coincides with the 20-day EMA which is placed at around 25,200. So, 25,200, 25,100 remains to be the very strong support. I agree that the markets are lacklustre; there is more of a stock specific market is waiting for this event to pan out and more importantly, is looking out for the Q1 numbers. So, stock-specific actions are likely to continue. If you look at the broader picture, we expect the Nifty to head towards 25,800 in the coming month with strong support at 25,200 because if you look at the market breadth, that is a good indicator to understand the sentiment of the you look at the market breadth, the percentage of stocks trading above 200-day moving average of CNX 500 is currently at 60% compared to 52% last month. It looks like maybe in the near term, we see more of a consolidation, but it is more of a buy-on-dip market with strong support at 25,200 and target of 25,800 to 26,000 in the coming sectors to talk about include banking. It is clearly outperforming even in this current corrective phase of the market. Particularly, PSU banks appear to be on the verge of a breakout. We believe PSU banks are the one sector which we like. We can see an uptick coming in the coming months. Apart from that, real estate as a sector, in the last two months, post RBI rate cut, has seen a sharp recovery. But what is happening now is nothing but a retracement of that rally. So, we believe in the real estate sector, banking. Metals. It looks like a retracement is happening. Metals should be bought on any dip. So, metals, real estate, PSU banks are the ones one should definitely look out from the medium We remain positive in real estate. Phoenix Mills remains our top pick. On Tuesday, we saw a strong move from Phoenix Mills and the company seems to be expanding its portfolio into the retail segment. The target of 18 million square feet is a good positive going for Phoenix coming to technical, again we believe that the stock seems to be forming the base at about 100 week EMA. Since November 2020, the stock had never breached 100 week EMA on the closing basis and currently the monthly charts for the last nine months show that the stock has been consolidating in this range of 1640 to 1300. So, we expect a breakout happening for Phoenix Mills, on the higher side in the coming days and we expect the stock to head towards 1840 keeping a stop loss of around 1488. So, Phoenix Mills is one which remains to be our top pick inside the real estate space where the risk-reward looks more favourable at the current market from that, coming to logistics, we like JSW Infra. The way things are panning out for most of this logistics, the sector has done nothing for a long time. We expect a gradual outperformance going forward for JSW Infra. Again, a strong base formation, 100-week EMA and joining the lows of strong buying demand emerging at the lower end of the rising channel, it looks like JSW Infra should see a relative outperformance in the days to come and we expect the stock to head towards Rs 336, keeping a stop loss of Rs 296.
Time of India
08-07-2025
- Business
- Time of India
4 sectors offer good valuations despite tariff issues; eyes on specialty chemicals: Jaiprakash Toshniwal
Live Events You Might Also Like: Fed may stay dovish amid manageable tariff impact: Stephen Innes You Might Also Like: Global headwinds: Should one focus on largecaps or look at midcaps and smallcaps? Nilesh Shetty answers You Might Also Like: How will the Indian market react if July 9th deadline passes without a tariff deal? Mukul Kochhar answers (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Fund Manager,, says the market has absorbed past negativity, anticipating a positive impact from a potential mini-deal or a temporary setback from delays. Domestically, strong macroeconomic policies support growth, while globally, NBFCs, manufacturing, IT, and pharma sectors offer reasonable valuations amidst tariff Niti Aayog projects India's market size to potentially reach $1 trillion, driven by investments in specialty chemicals. With policy support, companies are poised to capitalize on ready markets in Europe and the US. This shift towards specialty chemicals could double India's market size in the next five years, offering significant growth the US tariff as such, you put out the right word – ambiguous nature. We were earlier thinking about the things to come on 9th July, but now it is most likely to be postponed to August. It is difficult to comment on what can come. But having said that, whatever discussions we have with our investee company and everyone is waiting to see how things pan out, it will be difficult to clearly comment how the impact is going to terms of the deal, we already know that whatever happened in the past, the market has absorbed all the negativity around it. The deal, either comes in a mini form or gets delayed to some extent. If it comes in a mini form, it would be positive, and the market will have positive buoyancy because it gives more clarity as such. A postponement may have some negative impact for some time because the opportunity or clarity gets delayed for some time and that would be a with the US tariff issues, we have various other factors – both working domestically and globally. Domestically, we are on a very strong footing because both the macroeconomic factors – fiscal policy and monetary policy – are in sync, working, pushing for growth at least in the domestic market. Export is hardly 12% and so we should not worry much about the export the domestic side, we are very positive on NBFCs as a trade because we believe that the sector is very good in getting tailwind benefit from the rate cut as well as the other regulatory scenarios. On the other side, we are very positive on manufacturing, pharma, and even the manufacturing subsectors like chemicals or auto components and other related manufacturing sectors, There, we are very much positive as a one or two sectors can directly get impacted by that ambiguity. there would be N number of sectors which also indirectly get impacted. Having said that, at this point of time one, given the valuation comfort which we have and given the growth rate scenario, NBFCs, manufacturing, IT, and pharma will be the four sectors which come out with reasonable valuations from the tariff issues or the global sectors have already seen some kind of valuation multiple derating. These are very good sectors to find out newer opportunities to pick up for investors. Having said that, recently, Niti Aayog has released reports about chemical sectors. A lot many things were discussed about the policy initiatives needed from the government Niti Aayog reports talk about the market size of India moving to $1 trillion from a $200-250 billion market. If any policy support comes, companies will invest in specialty chemicals and others. India as a country is very positive on the specialty chemical side and we have seen numerous chemical companies talking about and having a ready market in Europe, and the commodity market is dominated by China. In that context, if more investments come into the speciality chemical side, it will be very positive for companies in this sector and also for India as we would be doubling of the market size in the next five has bucked the trend today and the commentary which we have got for Q1 is fairly reasonable and strong. But on a historical basis, this commentary has come after three to four quarters of a lull period. We need to see the sustainability of this commentary or the flow going ahead as such. Even in the commentary side, we have seen HPC doing better but the other food category or the juice category companies are not doing that well. So, we need to see the sustainability as well as the continuity of this trend going a house, we do not distinguish between the largecaps and midcaps purely because of the market cap definitions. We go by earning growth expectations of the sectors as well as the stocks and we try to find out stocks which can deliver reasonably 1.5x to 1.6x more than the nominal GDP growth in terms of earnings and that too on a sustainable basis. That is how we go as terms of growth, in the Nifty indices or the larger broader indices, the earning growth over the next two years could be in the lower double digit numbers, but there are certain sectors, stocks, as well as segments, in manufacturing or where the earning growth can be much higher than the 15% kind of number and that is where we are focusing on as a portfolio Toshniwal: Yes, that is true. Most of these five schemes which we got were from the merger of the IDBI MF which we got merged in somewhere around 2023 and most of these schemes we want to reposition. We have built the portfolios and now we want to go ahead and give it to our investors. To state our strategies in this fund, some of the names are the smallcap multi-asset allocation fund in which we recently had a NFO. Some of the names mentioning value and other schemes are there in the focused portfolio.
Time of India
07-07-2025
- Business
- Time of India
Global headwinds: Should one focus on largecaps or look at midcaps and smallcaps? Nilesh Shetty answers
Nilesh Shetty , Portfolio Manager, Quantum Advisors , says Indian market valuations are currently considered expensive, with large-cap stocks offering relatively better risk-reward compared to small and mid-caps. Earnings slowdown and potential disappointments in upcoming financial results necessitate investor caution. While geopolitics have limited direct impact, tariff negotiations with the US, particularly concerning Donald Trump, will be closely monitored. I want to get a sense of the market considering the valuations across market caps. What is your view in terms of valuations, especially in small and midcaps? How do you think the global headwinds might impact our markets? I am talking of a time frame of a quarter or two. Nilesh Shetty: Our valuations are expensive. I do not think there is enough for safety in terms of risk-reward right now. Largecaps are still better placed relative to small and midcaps. Earnings have slowed down. If you look at Q4 numbers and commentary coming from Q1 from corporates and in that environment, markets are within touching distance of their all-time highs. There could be earnings disappointment for a lot of companies in the near term in terms of the financial results. So, investors need to be careful. In terms of geopolitics, India remains relatively isolated from what is happening in West Asia barring the second order effects of impact on crude oil prices which India imports. But apart from that, it does not directly impact India. Of course, the tariff question and what India negotiates with Donald Trump will be keenly watched. Our sense is India is still relatively better placed than most other economies. We may be able to end up signing a better deal than other economies. By and large, it may not have a material impact on valuations, but it may impact sentiments in the near term. In this scenario, as the July 9th deadline is looming, there may not be much impact, but what should one do? Should one focus on largecaps or look at midcaps and smallcaps? Nilesh Shetty: Midcaps and smallcaps remain very expensive. You might have stock specific opportunities there. But by and large, I expect that sector to not… or that segment to not do well over the next 12 to 18 months. The largecaps are relatively better placed and you still have large pockets of opportunity there for you to allocate to the portfolio. At least our portfolio is heavily tilted towards larger cap names now where we find safety in terms of valuations. Live Events You Might Also Like: Rakshit Ranjan on sectors to focus on to geopolitically risk-proof your portfolio Let us talk about a time frame of six to eight months. How are you looking at the second half of this calendar year? In terms of your focus on consumption, where are you looking at, in terms of pockets driving factors which are going to be dominant in the next six months? In terms of themes, what is going to play out and what is out of flavour according to you now? Nilesh Shetty: Our portfolio style is value and so our focus remains on valuations. Even though consumption per se may pick up over the next six to eight months, the stocks that we have are where there is a significant margin of safety in terms of valuations. We have a significant allocation to two-wheeler space in the portfolio. We added a consumer durable company which underperformed over the last two years, but now offers reasonable valuation. We continue to have large allocation in private sector banks where there is a significant valuation comfort relative to their own two-year history, which is a large part of the portfolio. We also have names in the insurance space in the portfolio where valuations have derated materially and where there is a significant margin of safety. We continue to believe IT services offer reasonable valuations. They have missed the entire rally over the last 12 months and if there is any kind of uptick in IT discretionary spending in the western world, you will see these companies rerate and that is where investors should be allocated to. That is where we have allocated. It is where we think fundamentals offer much better margin of safety in terms of valuations. You Might Also Like: Expect double-digit earnings growth from BSE 500 companies going ahead: Mukul Kochhar ETMarkets WhatsApp channel )
Time of India
02-07-2025
- Business
- Time of India
RBI's warning: Indian equities risk being overvalued, earnings may not justify prices
Reserve Bank of India India's stock markets are showing signs of overvaluation, especially in the small- and mid-cap segments, the Reserve Bank of India (RBI) warned in its latest Financial Stability Report (FSR). The central bank's concerns come at a time when global economic growth remains uncertain, and corporate earnings may struggle to keep up with market expectations. The apex bank noted that current asset prices, both in India and globally, are running well ahead of economic fundamentals, driven by optimism that may not be justified in the present climate. To justify current valuations, corporate earnings will have to grow at a strong pace, which may be difficult in an uncertain economic environment, the report stated, quoted by ET. According to the FSR, while the Nifty Midcap 100 index is projected to grow at 17.4%, it would require a growth rate of 28% to fully support current valuations. Similarly, the Nifty Smallcap 100 is expected to grow at 16.9%, but needs a 30.6% expansion to be fairly priced. Nilesh Shetty, portfolio manager at Quantum Advisors, said valuations had already corrected earlier in the year but have since rebounded sharply. 'We are definitely seeing froth in the small and midcap stocks. The Indian markets did correct much before the tariff uncertainties and there was a significant correction in the small and midcap space, primarily because of valuations,' Shetty told ET. 'But there has been a significant rebound and we are very near to the all-time high, despite the global uncertainties. Earnings in Q1 could also be slower than expected.' Siddarth Bhamre, head of institutional research at Asit C Mehta, also noted that while midcaps are currently trading at a premium due to high growth potential, the sustainability of this growth remains in question. 'But is this growth high for just 1-2 years or in the longer term?' he said. He also flagged the limited availability of high-quality mid- and small-cap stocks as a reason for stretched valuations. 'People are ready to buy quality stocks at much higher multiples in the mid and smallcap segments and quality names here are not enough. There would always be some pockets and some names where we would find good value, but the job of identifying these names is getting difficult everyday,' Bhamre added. The RBI's report further cautioned that if earnings fail to meet expectations, or if valuations begin to revert, it could have a major impact on the market, particularly in the midcap space. The overvaluation risks aren't limited to India. The FSR also pointed out that asset prices in several global markets remain high relative to fundamentals. In the US, for instance, the Nasdaq is forecast to grow at 19.9% but would need to post 26% growth to justify current levels. 'Price corrections and elevated volatility of US equities can spill over to other markets, especially emerging markets like India,' the report said, highlighting the interconnected risks in the global financial system. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
